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Investing.com - Needham raised its price target on Amazon.com (NASDAQ:AMZN) to $265.00 from $220.00 on Tuesday, while maintaining a Buy rating on the e-commerce and cloud computing giant. The company, currently valued at $2.43 trillion, has demonstrated solid performance with 10.08% revenue growth over the last twelve months.
The price target increase represents a 20.5% upside from Amazon’s previous closing price, reflecting Needham’s growing confidence in the company’s financial outlook. According to InvestingPro analysis, Amazon shows strong financial health with a GREAT overall score, and additional insights are available through comprehensive Pro Research Reports.
In its analysis, Needham emphasized the importance of employee quality as a key asset and value driver for companies across internet, media, and entertainment sectors.
The firm specifically highlighted its methodology of linking employee quality to financial performance metrics, including absolute returns, trends in returns, and relative returns per employee.
Needham stated these quantitative metrics are crucial in determining whether a company employs "high quality (i.e., value creating) employees," suggesting Amazon’s workforce contributes positively to its financial performance.
In other recent news, Amazon is set to release its second-quarter financial results, with Citi projecting the company will exceed consensus expectations for both revenue and operating income. This optimism is largely driven by anticipated growth in Amazon Web Services (AWS), which remains a focal point for investors. Citi has raised its price target for Amazon to $265, highlighting improved retail trends and the increasing demand for AWS. Despite a slowdown in Prime Day growth, JMP Securities has maintained its $285 price target, emphasizing the importance of AWS and advertising growth due to their higher margins. Additionally, Amazon has expanded its quantum computing capabilities with the inclusion of IQM’s 54-qubit quantum processor on its Braket platform, offering customers more options for quantum research. In another development, Amazon has reduced its workforce within the AWS cloud computing division, though specific details about the layoffs were not disclosed. Lawmakers have also questioned Amazon, along with other tech giants, about their safeguards against potential risks from Chinese and Russian entities involved in submarine communications cables.
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